Exhibit 10.4
STOCK TRANSFER RESTRICTION AGREEMENT
THIS STOCK TRANSFER RESTRICTION AGREEMENT (as amended from time to
time pursuant to the terms hereof, this "Agreement"), is made and entered into
as of February 8, 2005, by and among WebSideStory, Inc., a Delaware corporation
("Parent"), and each of the undersigned shareholders (each a "Shareholder" and
collectively, the "Shareholders") of Avivo Corporation, a California corporation
(the "Company").
Recitals
A. Concurrently with the execution and delivery of this Agreement by
Parent and certain of the Shareholders, Parent, WSSI Acquisition Company, a
California corporation and a direct, wholly owned subsidiary of Parent ("Merger
Sub"), and the Company are entering into an Agreement and Plan of Merger of even
date herewith (as it may be amended from time to time pursuant to the terms
thereof, the "Merger Agreement"), which provides for the two-step merger (the
"Merger") of Merger Sub with and into the Company, and the Company with and into
a wholly-owned subsidiary of Parent, in accordance with the terms of the Merger
Agreement.
B. Prior to the consummation of the Merger, certain additional
Shareholders, upon delivery to Parent of counterpart signature pages to this
Agreement, will become parties to and bound by this Agreement, to the same
extent as if they had executed this Agreement as of the date hereof.
C. In consideration of the execution and delivery of the Merger
Agreement and the consummation of the Merger by Parent and Merger Sub, each
Shareholder desires to agree to certain restrictions on Transfer (as defined
herein) on the shares of Parent Common Stock issued to such Shareholder pursuant
to the terms of the Merger Agreement.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby
agree as follows:
1. Certain Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Merger Agreement. For all
purposes of and under this Agreement, the following terms shall have the
following respective meanings:
(a) "Shares" means (i) all shares of Parent Common Stock acquired by
Shareholder (other than pursuant to Outstanding Company Option Awards) pursuant
to the terms of the Merger Agreement, including, without limitation, shares of
Parent Common Stock held in or released from the Escrow Fund or issued pursuant
to the Express Search Advertising Earn-Out and (ii) all securities issued or
exchanged with respect to any shares of Parent Common Stock (described in (i)
above) upon any reclassification, recapitalization, reorganization, merger,
consolidation, spin-off, stock split, combination, stock or other dividend or
any other change in Parent's capital structure.
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(b) "Transfer" means, with respect to any security, the direct or
indirect assignment, sale, transfer, pledge, hypothecation, or the grant,
creation or suffrage of an option, lien or encumbrance in or upon, or the
placement in trust, or other disposition of such security or any right, title or
interest therein (including, but not limited to, any right or power to vote to
which the holder thereof may be entitled, whether such right or power is granted
by proxy or otherwise), or the record or beneficial ownership thereof, the offer
to make such a sale, transfer or other disposition, and each agreement,
arrangement or understanding, whether or not in writing, to effect any of the
foregoing.
2. Restrictions on Transfer. Except as permitted by the terms of this
Agreement, no Shareholder may make any Transfer of any Shares (the "Transfer
Restrictions") until such Transfer Restrictions terminate as set forth in
Section 3 below. Notwithstanding the foregoing, this Agreement shall not
prohibit a transfer of Shares by Shareholder (i) as bona fide gifts, (ii) to any
family member, trust or other Person in a transaction that is principally for
estate planning purposes, (iii) to any beneficiary, executor, trust, legal
guardian or legal representative upon the death or disability of Shareholder,
(iv) to a partnership transferring to its partners or former partners in
accordance with partnership interests, or (v) to a limited liability company
transferring to its members or former members in accordance with their interest
in the limited liability company, (collectively, "Permitted Transfers");
provided that, prior to any such Permitted Transfer, the transferee shall have
(x) executed a counterpart of this Agreement and (y) agreed in writing to hold
such Shares (or interest in such Shares) subject to all of the terms and
provisions of this Agreement.
3. Termination of Transfer Restrictions. The Transfer Restrictions shall
terminate with respect to the Shares held by each Shareholder as follows:
(a) The Transfer Restrictions with respect to 12.5% of the Shares
shall terminate on the later of (i) the third business day after Parent publicly
releases its financial results for the quarter ended March 31, 2005 and (ii) the
initial termination or release of restrictions under any lock-up agreement
entered into by an Existing Stockholder (as defined below) in connection with
Parent's initial public offering (collectively, the "Lock-Up Date");
(b) The Transfer Restrictions with respect to additional respective
increments of 12.5% of the Shares shall terminate on each of the third business
day after Parent publicly releases its financial results for the quarters ended
June 30, 2005, September 30, 2005 and December 31, 2005; and
(c) The Transfer Restrictions with respect to the remaining Shares
shall terminate on the one-year anniversary of the Lock-Up Date (the "Expiration
Date"); provided, however, that the Transfer Restrictions with respect to any
Shares shall terminate in advance of the Expiration Date in the event that such
Shares are sold pursuant to an effective registration statement filed in
accordance with the terms of Parent's Amended and Restated Registration Rights
Agreement; provided, further, that the Transfer Restrictions shall not terminate
with respect to any Shares held by Shareholder due to a release of shares of
Parent Common Stock from the Escrow Fund or that are issued pursuant to the
Express Search Advertising Earn-Out until the later of (i) the Expiration Date
or (ii) until such time as such Shares are actually received by Shareholder
pursuant to the terms of the Merger Agreement. For avoidance of
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doubt, none of the Transfer Restrictions set forth herein shall be deemed to
limit the Shareholder's rights pursuant to Parent's Amended and Restated
Registration Rights Agreement.
4. Public Offering Lock-Up. Notwithstanding the foregoing, in connection
with a public offering of Parent's securities (a "Public Offering"), prior to
the termination of all of the Transfer Restrictions set forth in Section 3
above, and upon request of Parent or the underwriters managing such offering,
each Shareholder who beneficially owns more than 10,000 Shares (as adjusted for
stock splits, recapitalizations and the like) agrees not to Transfer any Shares
without the prior written consent of Parent or such underwriters and to enter
into any "lock-up" agreement requested by any such underwriters; provided, that
no such lock-up agreement shall extend for more than 108 days and the Transfer
of any Parent Common Stock beneficially owned by TA Associates and Summit
Partners and Parent's then current Chief Executive Officer (the "Existing
Stockholders") is similiarly restricted.
5. Release of Lock-Up. In the event that the Company or its underwriter(s)
releases any Existing Stockholder from any lock-up restrictions on such Existing
Stockholders' Transfer of Shares imposed by the Company or such underwriters
pursuant to a lock-up agreement as described in Section 4 above, the Company or
the underwriters shall similarly release a proportional number of Shares from
the restrictions set forth in any lock-up agreement entered into by any
Shareholder pursuant to Section 4 above.
6. Restrictive Legends.
(a) Each certificate representing Shares shall by endorsed with
legends in substantially the following form:
(i) THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN A CERTAIN STOCK
TRANSFER RESTRICTION AGREEMENT BY AND AMONG PARENT AND CERTAIN HOLDERS OF STOCK
OF PARENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF PARENT.
(ii) Any other legends required by applicable securities laws
or contemplated by the Merger Agreement.
(b) Any legend endorsed on a certificate pursuant to Section 6(a)(i)
shall be removed and the Parent shall issue a certificate without such legend to
the holder of such Shares, if the Transfer Restrictions with respect to any such
Shares have been terminated.
7. Miscellaneous.
(a) Amendments, Modifications and Waivers. No amendment,
modification or waiver in respect of this Agreement shall be effective against
any party unless it shall be in writing and signed by Parent and Shareholder.
(b) Entire Agreement. This Agreement constitutes the entire
agreement among the parties to this Agreement and supersedes all other prior
agreements and
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understandings, both written and oral, between the parties with respect to the
subject matter hereof.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
(d) Assignment and Successors. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns; provided, that,
neither this Agreement nor any of the rights, interests or obligations of the
parties hereto may be assigned by any party hereto without prior written consent
of the other party hereto except that Parent, without obtaining the consent of
any Shareholder, shall be entitled to assign this Agreement or all or any of its
rights or obligations hereunder to any one or more Affiliates of Parent. Any
assignment in violation of the foregoing shall be void and of no effect.
(e) No Third Party Rights. Except as provided by Section 4 hereof,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any Person (other than the parties hereto) any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
(f) Cooperation. Shareholder agrees to cooperate fully with Parent
and to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by this Agreement
and to carry out the intent and purpose of this Agreement. Shareholder hereby
agrees that Parent may publish and disclose such Shareholder's identity and
ownership of Shares and the nature of such Shareholder's commitments,
arrangements and understandings under this Agreement as may be required by
applicable Law or in any filing made by Parent with the Securities and Exchange
Commission.
(g) Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
(h) Specific Performance; Injunctive Relief. Shareholder
acknowledges that Parent shall be irreparably harmed and that there shall be no
adequate remedy at law for a violation of any of the covenants or agreements of
Shareholder set forth in this Agreement. Therefore, Shareholder hereby agrees
that, in addition to any other remedies that may be available to Parent, as
applicable upon any such violation, Parent shall have the right to enforce such
covenants and agreements by specific performance, injunctive relief or by any
other means available to such party at law or in equity without posting any bond
or other undertaking.
(i) Notices. All notices, consents, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if (i) delivered to the appropriate address by hand or overnight
courier (providing proof of delivery) or (ii) sent by facsimile or e-mail with
confirmation of transmission by the transmitting
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equipment confirmed with a copy delivered as provided in clause (i), in each
case to the parties at the following address, facsimile or e-mail address (or at
such other address, facsimile or e-mail address for a party as shall be
specified by like notice): (A) if to Parent, to the address, e-mail address or
facsimile provided in the Merger Agreement, including to the persons designated
therein to receive copies; and (B) if to Shareholder, to Shareholder's address,
e-mail address or facsimile shown below Shareholder's on the signature pages
hereof.
(j) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, and shall become effective when
counterparts have been signed by each of the parties and delivered to the other
parties; it being understood that all parties need not sign the same
counterpart.
(k) Headings. The headings contained in this Agreement are for the
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
(l) Additional Shareholders. Each holder of shares of Parent Common
Stock who delivers a counterpart signature page to this Agreement to Parent
after the date of the Merger Agreement agrees that it is a party to and bound by
the terms of this Agreement and shall be deemed a "Shareholder" hereunder.
[Signatures on the Following Pages]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date first above written.
WEBSIDESTORY, INC.:
By:__________________________________________
Name:________________________________________
Title:_______________________________________
SHAREHOLDER:
SOFINNOVA CAPITAL III
a ___________________________________________
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
[Counterpart Signature Page to Stock Transfer Restriction Agreement]
SOFINNOVA VENTURE AFFILIATES IV, L.P.,
a ___________ limited partnership
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
SOFINNOVA VENTURE PARTNERS IV, L.P.,
a ___________ limited partnership
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
[Counterpart Signature Page to Stock Transfer Restriction Agreement]
NEW ENTERPRISE ASSOCIATES 10, L.P.,
a ___________ limited partnership
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
NEA VENTURES 2000, L.P.,
a ___________ limited partnership
By:__________________________________________
Name:________________________________________
Title:_______________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
[Counterpart Signature Page to Stock Transfer Restriction Agreement]
_____________________________________________
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Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
_____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
_____________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
[Counterpart Signature Page to Stock Transfer Restriction Agreement]
_____________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned: __________________
[SHAREHOLDER]
_____________________________________________
Address:
_____________________________________________
_____________________________________________
_____________________________________________
Telephone: (___) _____-________
Facsimile: (___) _____-________
E-Mail Address: ____________________
Shares Beneficially Owned:___________________
[Counterpart Signature Page to Stock Transfer Restriction Agreement]